State­ment by Isle of Man Chief Min­is­ter Howard Quayle MHK

The Malta Business Weekly - - FRONT PAGE -

Mr Deputy Speaker,

I briefed Honourable Mem­bers last month re­gard­ing co­or­di­nated en­quiries the Isle of Man Govern­ment had re­ceived from me­dia as­so­ci­ated with the In­ter­na­tional Con­sor­tium of In­ves­tiga­tive Jour­nal­ists.

As I out­lined, this me­dia at­ten­tion has cen­tred on the im­por­ta­tion of busi­ness jets into the EU through the Isle of Man, with a par­tic­u­lar fo­cus on the VAT treat­ment of air­craft leas­ing ar­range­ments.

You will have watched with con­sid­er­able in­ter­est the mat­ters I dis­cussed with you un­fold­ing over the week­end and yes­ter­day and I wanted to pro­vide an up­date.

As out­lined in the press re­lease is­sued by the Cab­i­net Of­fice on 24th Oc­to­ber we have in­vited HM Trea­sury to con­duct an as­sess­ment of the prac­tice for the im­por­ta­tion of busi­ness jets via the Isle of Man into the EU.

If there is any ev­i­dence of wrong­do­ing then all ap­pro­pri­ate ac­tion will be taken against in­di­vid­u­als or com­pa­nies.

The scop­ing of the as­sess­ment by se­nior of­fi­cers has be­gun and will be pub­lished this month, with the work be­ing com­pleted in 2018.

As I have con­firmed, dur­ing the course of an in­ter­nal re­view, we have found no ev­i­dence of wrong­do­ing, or rea­son to be­lieve that our Cus­toms and Ex­cise Divi­sion has been in­volved in the mis­taken re­fund­ing of VAT.

The VAT treat­ment of the im­por­ta­tion of air­craft into the EU is a highly tech­ni­cal and com­plex area in which the Isle of Man fol­lows the same pol­icy, laws and rules as the United King­dom.

How­ever, we acted swiftly and de­ci­sively and have taken ac­tion to demon­strate that the Isle of Man is a well-reg­u­lated, open and trans­par­ent mem­ber of the in­ter­na­tional com­mu­nity.

As you will have seen from last night’s Panorama Pro­gramme, there have also been al­le­ga­tions made in re­spect of an Or­der laid be­fore Tyn­wald in 2005.

Whilst en­acted I should ad­vise Hon. Mem­bers this was never utilised.

It is dif­fi­cult for any ad­min­is­tra­tion to­day to un­der­stand or at­tempt to jus­tify the think­ing made by an ad­min­is­tra­tion nearly 13 years ago. It re­lates to ar­range­ments for ex­chang­ing in­for­ma­tion for tax pur­poses in 2005 which have now been re­placed by the OECD Com­mon Re­port­ing Stan­dard.

We are con­sid­er­ing all the al­le­ga­tions made to de­ter­mine next steps and what ac­tion can be taken in re­la­tion to the past.

That be­ing said Mr Deputy Speaker, as I have set out, where the Isle of Man’s in­tegrity is chal­lenged we will not be com­pla­cent.

I will con­tinue to hon­our my com­mit­ment that where ev­i­dence of any wrong­do­ing is found the Isle of Man will take the ap­pro­pri­ate ac­tion.

You will, I am sure, have also seen and fol­lowed the in­tense me­dia and po­lit­i­cal fo­cus on off-shore fi­nan­cial cen­tres and tax and trans­parency stan­dards, not only from the UK but fur­ther afield across France, Ger­many, Italy, Rus­sia, Japan and the US.

Honourable Mem­bers this de­bate will con­tinue in the days and months ahead.

Our over­all mes­sage re­mains clear: The Isle of Man is not a place that wel­comes those seek­ing to evade or ag­gres­sively avoid taxes.

We are proud of the role we have taken in mov­ing the in­ter­na­tional tax agenda for­ward.

The Isle of Man has con­sis­tently been pre­pared to step out in front to sup­port de­vel­op­ing in­ter­na­tional tax trans­parency ini­tia­tives – we do not wait.

We did this with tax in­for­ma­tion ex­change on re­quest be­fore 2009 and again in 2013 as an early adopter of the Com­mon Re­port­ing Stan­dard, which was a sig­nif­i­cant step change in trans­parency.

We now pro­vide full au­to­matic ex­change of tax in­for­ma­tion with EU Mem­ber States, the UK and the United States.

Again the Isle of Man has been a com­mit­ted and ac­tive par­tic­i­pant in the OECD’s Global Fo­rum which is the body charged with mon­i­tor­ing the im­ple­men­ta­tion of tax trans­parency stan­dards. When pre­vi­ously re­viewed by the OECD the Isle of Man re­ceived a top rat­ing.

As Honourable Mem­bers are aware we are await­ing the out­come of our lat­est re­view by the OECD.

How­ever it can­not - and should not be over­looked - that to truly com­bat eva­sion and abuse, ac­tion not only needs to be global but it also needs to be im­ple­mented con­sis­tently and ef­fec­tively.

With­out this the prob­lem will be dis­placed rather than re­solved.

We there­fore wel­come any en­cour­age­ment by the in­ter­na­tional com­mu­nity in­clud­ing gov­ern­ments and all other rel­e­vant in­ter­na­tional bod­ies to­wards a global so­lu­tion.

I hope that this pro­vides an up­date but I will con­tinue to keep Honourable Mem­bers up­dated as these mat­ters de­velop.

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